Record deliveries, improving margins and ramped-up production should make Tesla one of the best-performing stocks of 2022, according to Goldman analyst Mark Delaney.
Tesla (TSLA) – Get Tesla Inc Report shares were tabbed as a ‘top pick’ for 2022 by Goldman analyst Mark Delaney Monday following the clean-energy carmaker’s record fourth quarter deliveries earlier this month.
Delaney raised his price target on Tesla to $1,200 per share, from a previous peg of $1,125, citing “robust Q4 deliveries” that he sees as a signal for further unit growth this year and next. He also noted the group’s vertical integration of hardware and software, alongside its ecosystem of charging stations, as well as its growth potential in solar and storage.
Tesla said on January 2 that deliveries for the three months ending in December rose 70% from last year to 308,600 units, its sixth consecutive quarterly record, taking the 2021 total to 936,172 units.
Tesla is also improving its profitability as its brings production and deliveries to scale, with third quarter margins reaching 30.5% — an all-time high — as revenues reached $13.7 billion. Tesla will report its fourth quarter earnings on January 27.
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“We believe that Tesla, given its leadership position in EVs, and its focus on clean transportation more broadly will be best-positioned to capitalize on the long-term shift to EV,” Delaney wrote. “We expect Tesla to expand margins in the intermediate term as it ramps the important Model Y product as well as new factories in Berlin, Germany and Austin, Texas, and in the long-term as it increases its mix of software revenue. We see upside consensus to FactSet estimates in the next few years.”
Tesla shares were marked 2.7% lower in pre-market trading Monday to indicate an opening bell price of $999.14 each, a move that would still leave the stock with a six-month gain of around 45.7%.
